Canadian Oil-Sands Producers Considering Hong Kong Listings

By Jeremy van Loon -
Mar 6, 2012

Canadian oil-sands producers are
considering following Sunshine Oilsands Ltd. in raising capital
on the Hong Kong stock exchange to take advantage of Asian
energy demand, a lawyer working with the companies said.

The transactions could involve initial public offerings or
secondary listings, said Rick Pawluk, a partner at McCarthy
Tetrault LLP in Calgary and adviser to Sunshine Oilsands on
their Hong Kong IPO. The deals would raise “hundreds of
millions” of dollars for the Calgary-based companies, he said,
declining to identify them.

“At the moment there are more pools of capital in that
part of the world,” Pawluk said in a phone interview yesterday.
“Management has to be more flexible in how to raise capital.
North America is not an automatic choice anymore -- you have to
look at other markets.”

Chinese interest in Canada’s oil sands led Cnooc Ltd. (883) to
pay $2.1 billion in cash and debt for Opti Canada Inc. last
year. Oil-sands production is expected to more than double to
3.7 million barrels a day by 2025, according to the Canadian
Association of Petroleum Producers.

Sunshine Oilsands raised HK$4.49 billion ($580 million) in
a Hong Kong initial public offering on March 1. Most of the
proceeds will fund the Calgary-based company’s oil-sands
development. China Investment Corp. (CHIVCZ), the nation’s sovereign
wealth fund, agreed to buy $150 million of stock and hold onto
it, according to the prospectus. The shares have declined 4.7
percent since their debut.

“More investment by Asian investors will definitely speed
the rate at which assets are developed,” said Robert Mark, an
energy analyst for MacDougall, MacDougall & MacTier Inc., a
Montreal-based investment firm. “This is Economics 101. Asians
have capital account surpluses and are short on commodities.
It’s a natural match.”